Developer attempts to reignite €1bn Chicago skyscraper case

Property developer Garrett Kelleher will attempt to re-ignite his $1.2 billion (€1.06 billion) case against the National Asset Management Agency (Nama) over the failed plan to develop a skyscraper in Chicago.

Mr Kelleher’s case was dismissed in an Illinois court last month after a judge found that Nama was not subject to the US court’s jurisdiction as it was controlled by a foreign state. The US has legal limitations on foreign states or their agencies being sued in its courts.

However, Mr Kelleher is now disputing the judgement, arguing in legal filings that it “contains manifest errors of law and mistakenly overlooks material allegations”. The Dublin-born developer, who for many years has pursued business interests and lived in the US, is now seeking relief from the original judge’s finding on three grounds.

He has recruited specialist litigation firm Quin Emanuel Urquhart & Sullivan to act on his behalf. The blue chip firm has previously represented the Winklevoss twins in their action against Facebook, and $100 billion (€88.5 million)-rated company Uber.

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In legal papers filed with the Illinois court last week, lawyers for Mr Kelleher argued that the original judgement failed to properly consider his allegations, and that the court erred in two separate ways in determining that Nama was not subject to its jurisdiction.

His case holds that a Nama subsidiary involved in the case is not majority controlled by the Irish state, and that it was carrying on commercial activities that had an impact in the United States, and therefore is subject to the US court’s jurisdiction.

“This court should vacate both its opinion and the judgement” and “modify the Opinion to correct the manifest errors of law contained therein”, the submission argues.

Anglo loans

The Chicago spire project was funded loans from Anglo Irish Bank, and also by equity from Mr Kelleher’s Shelbourne group of companies. Shelbourne is described in the legal papers as having invested “$225 million [€199 million] of its own cash and through the sweat of its own brow had created another $300 million [€265 million] of equity in the project”.

Mr Kelleher has made multiple allegations against Nama, including that it made inaccurate disclosures to potential bidders for the project, resulting in “few and low bids” for the project, the court papers state. Claiming that the agency conducted a “bungled marketing” of the loan secured on the site, Mr Kelleher also alleges that “the Spire would have been completed but for Nama’s interference”.

Nama has previously contested the allegations made as part of the case, and welcomed the judge’s original decision to dismiss Mr Kelleher’s claim. A spokesman said the agency had no comment on the latest developments.

The Spire project was among the most ambitious developments ever undertaken by an Irish property developer overseas. Designed by world-renowned architect Santiago Calatrava, it was to contain 1,200 apartments over its 150 storeys, and would be constructed in a style that gave the impression the building was being twisted. In early 2008, a launch party for the project was attended by Hollywood stars Liam Neeson and his late wife Natasha Richardson.

The loans were sold to US developer Related Midwest, which is currently engaged in the planning process in Chicago. The only current evidence of the plan to develop the Spire project is a large hole in the ground where its foundations were to stand.